Decentralized Customer-Controlled Credit Verification

Abstract

Systems and methods for decentralized distribution of verifiable information, such as financial information, without requiring resort to centralized information system at the time of a query or other request for information. A decentralized method includes the steps of creating a digital wallet, issuing / receiving an issued verifiable digital credential signed by a credential issuer acting as a trust anchor for a claim contained in the verifiable digital credential, storing the verifiable digital credential within the digital wallet, receiving a request for verified information, and providing the verifiable digital credential, including the claim, from the digital wallet. The verification of information may occur as a zero-knowledge proof such that a required standard is verified as satisfied without disclosing more information about a consumer or other user than is absolutely necessary.

Description

CROSS-REFERENCED APPLICATIONS[0001]This patent application claims priority to U.S. Provisional Patent Application No. 62 / 787,138, which was filed on Dec. 31, 2018.BACKGROUND OF THE INVENTION1. Field of the Invention[0002]The present invention relates to consumer reporting, and more particularly to systems and methods for providing decentralized customer-controlled credit verification.2. Background and Related Art[0003]Traditionally, a number of centralized consumer reporting agencies have been responsible for providing credit verification services as a part of the credit decision-making process. Would-be consumers / borrowers approach would-be lenders about obtaining a loan, credit line, or other type of credit, and the would-be lenders obtain information about the potential borrower. The lender then uses the borrower information to contact one of the several consumer reporting agencies to request information or credit verification sufficient to allow the lender to determine whether t...

AI Technical Summary

Benefits of technology

The invention provides a system and method for decentralized distribution of verifiable information, such as financial information, without requiring a centralized information system at the time of verification. The method involves creating a digital wallet on a consumer's device, receiving a verification request from a lender, and providing the lender with a verifiable digital credential containing a claim regarding the consumer's creditworthiness. The method also includes steps of creating a consumer identification for the consumer, registering a new identifier on a trust network, and accessing the consumer's financial account to obtain information for the verification request. The invention allows for a more secure and efficient way of verifying a consumer's creditworthiness.

Problems solved by technology

Traditionally, the data stored by the consumer reporting agencies is opaque to the consumer, and the consumer has little ability to view, let alone control, the data maintained by the consumer reporting agencies.

While consumer reporting agencies are required by the Fair Credit Reporting Act to timely correct mistakes contained within their stores of consumer data, such mistakes can prevent consumers from obtaining credit in a timely fashion and on the best terms.

Additionally, the consumer has little to no control over the personal information stored by the consumer reporting agencies, and the information provided by the consumer reporting agencies in response to credit inquiries.

Data breaches have occurred at times, putting consumers' information and creditworthiness at risk.

When lenders obtain more personal information about consumers than is strictly necessary for the lending process, that information becomes subject to added risks, such as data breaches of systems other than the systems of the consumer reporting agencies.

In addition to these problems, the consumer information at any one consumer reporting agency may differ from the consumer information at other consumer reporting agencies.

This presents a problem, such as when a consumer takes the time to verify information at one agency only to have a lender obtain creditworthiness information from a different, unverified, agency.

A possible result of agency differences in data can be a surprise variation from expected credit application results, such as credit denial, increased loan interest rates, or other negative consequences to the lender or the consumer.

Accordingly, there are significant difficulties inherent in the current centralized or semi-centralized system for creditworthiness verification.

Lenders, however, are understandably wary of propositions that would decentralize maintenance of creditworthiness information.

Furthermore, a decentralized information system could result in delays in the decision making process if lenders are unable to obtain trusted information in a timely fashion.

Accordingly, there have been significant impediments to adoption of any kind of decentralized system.

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